Incoterms are the standard trade terms, published by the International Chamber of Commerce, that decide who pays for each leg of a shipment and where risk passes from seller to buyer. Choosing the right term up front avoids disputes over freight, insurance and customs later. These are the terms buyers use most often when importing from India under Incoterms 2020.
EXW: Ex Works
The seller makes the goods available at its own premises. The buyer arranges everything else, including export clearance in India, which is often impractical for an overseas buyer. EXW suits buyers with their own agent in India.
FOB: Free On Board
The seller clears the goods for export and loads them on board the vessel at the Indian port. Risk passes to the buyer once the goods are on board. The buyer books and pays for sea freight and insurance. FOB suits buyers who have strong freight rates of their own.
CFR: Cost and Freight
The seller also books and pays for sea freight to the destination port, but risk still passes to the buyer when the goods are loaded in India. The buyer arranges insurance and import clearance.
CIF: Cost, Insurance and Freight
As CFR, plus the seller buys cargo insurance for the buyer. Under Incoterms 2020 the minimum cover for CIF is Institute Cargo Clauses (C), so buyers who want wider cover should ask for it in the contract.
DAP: Delivered At Place
The seller delivers the goods to a named place in the destination country, ready for unloading. The buyer handles import clearance and duties. DAP is the usual term for door-to-door deliveries.
How to choose
First-time importers often prefer CIF or DAP, because the exporter manages freight and the buyer receives one landed price. Experienced importers with their own forwarder often prefer FOB for control over freight costs. Whatever you choose, name the exact port or place after the term, for example “CIF Jebel Ali, Incoterms 2020”.
Published 14 October 2026 by ARR Global. More guides